Upshaw Ltd. bought a lift truck with a list price of $ 30,000. The dealer granted a 10% reduction in the list price, and an additional 2% cash discount on the net price when payment was made in 30 days. Provincial sales tax was $ 1,785 and Upshaw paid an extra $ 350 to have a special horn installed. The recorded cost of the truck should be

Question

Quizplus · Accepted Answer

List price = $30,000 
10% discount on list price = 0.10 x $30,000 = $3,000 
Net price = $30,000 - $3,000 = $27,000 
2% cash discount on net price = 0.02 x $27,000 = $540 
Net price after cash discount = $27,000 - $540 = $26,460 
Add-ons: 
Provincial sales tax = $1,785 
Special horn = $350 
Total recorded cost = $26,460 + $1,785 + $350 = $28,595